symantec Q209EarningsSupplementalData

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symantec Q209EarningsSupplementalData

  1. 1. Symantec's Fiscal 2009 Second Quarter Supplemental Information (Unaudited) SUMMARY (1) (in thousands) Q2 09 vs. Q2 08 Q2 09 vs. Q1 09 Sep-08Q Growth Growth Revenue and Earnings Results Jun-08Q Sep-07Q Non-GAAP Revenue $1,522,979 $1,655,093 $1,437,332 6% -8% GAAP Revenue $1,518,010 $1,650,322 $1,419,089 7% -8% Non-GAAP EPS $0.37 $0.40 $0.29 28% -8% GAAP EPS $0.16 $0.22 $0.06 167% -27% Q2 09 vs. Q2 08 Q2 09 vs. Q1 09 Q2 09 % of Total Growth Growth Revenue Revenue by Segment - Non-GAAP Sep-08Q Jun-08Q Sep-07Q Security & Compliance (2) $403,184 $448,923 $399,485 1% -10% 26% Storage and Server Management $572,539 $615,815 $512,354 12% -7% 38% (2) Services $106,634 $116,740 $91,657 16% -9% 7% Total Enterprise: $1,082,357 $1,181,478 $1,003,496 8% -8% 71% Consumer $440,192 $473,139 $433,508 2% -7% 29% Other $430 $476 $328 31% -10% 0% #REF! Q2 09 vs. Q2 08 Q2 09 vs. Q1 09 Q2 09 % of Total Growth Growth Revenue Revenue by Geography - Non-GAAP Sep-08Q Jun-08Q Sep-07Q International $763,891 $866,006 $729,788 5% -12% 50% U.S. $759,088 $789,087 $707,544 7% -4% 50% Americas (U.S., Latin America, Canada) $826,238 $865,247 $776,692 6% -5% 54% EMEA $480,661 $558,649 $465,676 3% -14% 32% Asia Pacific & Japan $216,080 $231,197 $194,964 11% -7% 14% Q2 09 vs. Q2 08 Q2 09 vs. Q1 09 Growth Growth Expenses and Profitability - Non-GAAP Sep-08Q Jun-08Q Sep-07Q Gross Margin 85.7% 86.5% 85.3% N/A N/A Operating Expenses $861,726 $946,616 $864,820 0% -9% Operating Expenses as a % of total revenue 57% 57% 60% N/A N/A Operating Income $443,025 $485,092 $361,547 23% -9% Operating Margin 29.1% 29.3% 25.2% N/A N/A Net Income $311,177 $341,780 $262,635 18% -9% Fully Diluted Shares Outstanding 852,334 853,994 892,759 N/A N/A Q2 09 vs. Q2 08 Q2 09 vs. Q1 09 Growth Growth Balance Sheet & Cash Flow Metrics Sep-08Q Jun-08Q Sep-07Q Cash position (including short-term investments) $2,304,642 $2,286,305 $1,998,201 15% 1% DSO 39 days 36 days 38 days N/A N/A Non-GAAP Deferred Revenue $2,721,059 $3,024,516 $2,624,485 4% -10% GAAP Deferred Revenue $2,713,226 $3,011,682 $2,598,597 4% -10% #DIV/0! #DIV/0! Cash Flow from Operating Activities $248,291 $413,576 $330,969 -25% -40% #DIV/0! #DIV/0! Purchase of property and equipment $67,644 $57,695 $63,341 7% 17% Stock Repurchase - number of shares purchased 9.3 million shares 9.7 million shares 21.6 million shares . (1) The information presented above includes selected historical GAAP and non-GAAP financial information. To see the most directly comparable GAAP financial measures together with the reconciliation, go to: http://investor.symantec.com/phoenix.zhtml?c=89422&p=irol-irhome. (2) During the first quarter of fiscal year 2009, Altiris services’ revenue was reclassified from the Security and Compliance segment to the Services segment. Data shown from the prior periods have been reclassified to match the current reporting structure. 1
  2. 2. Symantec's Fiscal 2009 Second Quarter Supplemental Information (Unaudited) Large Transactions Summary Greater than Greater than $300k $1m 326 77 Sep-08 336 85 Jun-08 449 115 Mar-08 554 127 Dec-07 302 64 Sep-07 249 48 Jun-07 Headcount Acquisition headcount Total Employees included in total 17,993 7 Sep-08 17,763 101 Jun-08 17,648 - Mar-08 17,906 164 Dec-07 18,059 - Sep-07 17,705 980 Jun-07 2
  3. 3. SYMANTEC CORPORATION check tax rate in cell 131 GAAP Statements of Operations re-check out amounts for FY2009 (In thousands, except per share data) (Unaudited) Fiscal YTD Three months ended Fiscal Three months ended Fiscal Three months ended 2009 3-Oct-08 4-Jul-08 2008 28-Mar-08 28-Dec-07 28-Sep-07 29-Jun-07 2007 30-Mar-07 29-Dec-06 29-Sep-06 30-Jun-06 Net revenues: Content, subscriptions, and maintenance $ 2,471,707 $ 1,180,715 $ 1,290,992 $ 4,561,566 $ 1,190,440 $ 1,167,443 $ 1,117,165 $ 1,086,518 $ 3,917,572 $ 1,051,112 $ 993,889 $ 955,025 $ 917,546 Licenses 696,625 337,295 359,330 1,312,853 349,301 347,808 301,924 313,820 1,281,794 306,105 321,984 305,383 348,322 Total net revenues 3,168,332 1,518,010 1,650,322 5,874,419 1,539,741 1,515,251 1,419,089 1,400,338 5,199,366 1,357,217 1,315,873 1,260,408 1,265,868 Cost of revenues: Content, subscriptions, and maintenance 430,644 212,070 218,574 826,339 206,746 204,355 205,572 209,666 823,525 210,888 213,977 203,524 195,136 Licenses 18,845 10,398 8,447 44,664 13,230 10,304 9,892 11,238 49,968 10,502 12,015 11,539 15,912 Amortization of acquired product rights 171,563 86,602 84,961 349,327 86,403 84,502 89,062 89,360 342,333 84,873 84,511 85,338 87,611 Total cost of revenues 621,052 309,070 311,982 1,220,330 306,379 299,161 304,526 310,264 1,215,826 306,263 310,503 300,401 298,659 Gross Profit 2,547,280 1,208,940 1,338,340 4,654,089 1,233,362 1,216,090 1,114,563 1,090,074 3,983,540 1,050,954 1,005,370 960,007 967,209 Operating expenses: Sales and marketing 1,259,802 596,983 662,819 2,415,264 623,592 627,980 595,162 568,530 2,007,651 575,546 500,067 464,589 467,449 Research and development 450,484 219,049 231,435 895,242 223,314 225,293 221,057 225,578 866,882 218,468 216,969 218,250 213,195 General and administrative 177,604 84,838 92,766 347,642 92,792 82,600 86,405 85,845 316,783 79,266 78,820 80,076 78,621 Amortization of other purchased intangible assets 111,030 55,651 55,379 225,131 56,284 54,996 56,926 56,925 201,502 49,932 50,476 50,480 50,614 Restructuring 26,795 9,790 17,005 73,914 22,031 23,305 9,578 19,000 70,236 50,758 - 6,220 13,258 Integration - - - - - - - - 744 744 - - - Impairment of assets 26,204 26,204 - 94,616 1,928 6,142 86,546 - - - - - - Total operating expenses 2,051,919 992,515 1,059,404 4,051,809 1,019,941 1,020,316 1,055,674 955,878 3,463,798 974,714 846,332 819,615 823,137 Operating income 495,361 216,425 278,936 602,280 213,421 195,774 58,889 134,196 519,742 76,240 159,038 140,392 144,072 Interest income 30,290 12,302 17,988 76,896 16,899 19,997 19,179 20,821 122,043 30,503 28,741 34,983 27,816 Interest expense (16,281) (6,712) (9,569) (29,480) (9,095) (7,477) (6,617) (6,291) (27,233) (6,246) (6,257) (8,053) (6,677) Settlements of litigation (1,748) (1,748) - 58,500 58,500 - - - - - - - - Other income (expense), net (7,095) (7,034) (61) 4,327 3,444 (2,348) 1,965 1,266 17,070 5,568 (3,897) 15,581 (182) Income before income taxes and loss from joint venture 500,527 213,233 287,294 712,523 283,169 205,946 73,416 149,992 631,622 106,065 177,625 182,903 165,029 Provision for income taxes 156,835 62,414 94,421 248,673 96,783 74,056 23,048 54,786 227,242 45,171 60,855 56,722 64,494 Loss from joint venture 16,927 10,746 6,181 - - - - - Net income $ 326,765 $ 140,073 $ 186,692 $ 463,850 $ 186,386 $ 131,890 $ 50,368 $ 95,206 $ 404,380 $ 60,894 $ 116,770 $ 126,181 $ 100,535 $ - $ - $ - Earnings per share - diluted $ 0.38 $ 0.16 $ 0.22 $ 0.52 $ 0.22 $ 0.15 $ 0.06 $ 0.10 $ 0.41 $ 0.07 $ 0.12 $ 0.13 $ 0.10 853,174 852,334 853,994 884,136 856,747 876,221 Weighted-average shares outstanding - diluted 892,759 910,302 983,261 932,985 963,309 987,916 1,048,833 SYMANTEC CORPORATION (1) Non-GAAP Statements of Operations (In thousands, except per share data) (Unaudited) Fiscal YTD Three months ended Fiscal Three months ended Fiscal Three months ended 2009 3-Oct-08 4-Jul-08 2008 28-Mar-08 28-Dec-07 28-Sep-07 29-Jun-07 2007 30-Mar-07 29-Dec-06 29-Sep-06 30-Jun-06 Net revenues $ 3,178,072 $ 1,522,979 $ 1,655,093 $ 5,937,189 $ 1,547,987 $ 1,529,026 $ 1,437,332 $ 1,422,844 $ 5,252,664 0 $ 1,364,782 0 $ 1,326,341 0 $ 1,273,392 $ 1,288,149 Cost of revenues 441,613 218,228 223,385 854,269 216,016 210,780 210,964 216,508 857,056 0 217,936 0 222,172 0 209,879 207,069 Gross profit 2,736,459 1,304,751 1,431,708 5,082,920 1,331,971 1,318,246 1,226,368 1,206,336 4,395,608 1,146,846 1,104,169 1,063,513 1,081,080 - - Operating expenses: Sales and marketing 1,222,399 578,810 643,589 2,355,551 607,770 613,857 580,736 553,188 1,950,202 563,457 487,210 446,949 452,586 Research and development 423,789 204,946 218,843 835,977 209,079 209,579 206,056 211,263 807,950 206,148 202,607 200,963 198,232 General and administrative 162,154 77,970 84,184 314,582 84,371 75,272 78,028 76,911 291,766 72,036 72,844 73,293 73,593 Total operating expenses 1,808,342 861,726 946,616 3,506,110 901,220 898,708 864,820 841,362 3,049,918 # 841,641 # 762,661 # 721,205 724,411 - - Operating income 928,117 443,025 485,092 1,576,810 430,751 419,538 361,548 364,974 1,345,690 305,205 341,508 342,308 356,669 Interest income 30,290 12,302 17,988 76,896 16,899 19,997 19,179 20,821 122,041 30,501 28,741 34,983 27,816 Interest expense (16,281) (6,712) (9,569) (29,480) (9,095) (7,477) (6,617) (6,291) (27,233) (6,245) (6,257) (8,053) (6,678) Other income (expense), net (7,095) (7,034) (61) 1,050 3,444 (5,626) 1,966 1,266 (2,919) 2,344 (3,897) (1,184) (182) Income before income taxes and loss from joint venture 935,031 441,581 493,450 1,625,276 442,000 426,432 376,076 380,770 1,437,579 # 331,805 # 360,095 # 368,054 377,625 Provision for income taxes 268,552 121,693 146,859 498,765 132,570 134,684 113,440 118,072 445,102 105,038 109,288 106,590 124,185 Loss from joint venture 13,522 8,711 4,811 - - - - - - - - - - Net income $ 652,957 $ 311,177 $ 341,780 $ 1,126,511 $ 309,430 $ 291,748 $ 262,636 $ 262,698 $ 992,477 $ 226,767 $ 250,807 $ 261,464 $ 253,440 - - - Earnings per share - diluted $ 0.77 $ 0.37 $ 0.40 $ 1.27 $ 0.36 $ 0.33 $ 0.29 $ 0.29 $ 1.01 $ 0.24 $ 0.26 $ 0.26 $ 0.24 853,174 852,334 853,994 884,136 856,747 876,221 Weighted-average shares outstanding - diluted 892,759 910,302 983,261 932,985 963,309 987,916 1,048,833 (1) The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. 3
  4. 4. SYMANTEC CORPORATION Reconciliation of Non-GAAP Adjustments Statements of Operations (In thousands, except per share data) (Unaudited) Fiscal YTD Three months ended Fiscal Three months ended Fiscal Three months ended 2009 3-Oct-08 4-Jul-08 2008 28-Mar-08 28-Dec-07 28-Sep-07 29-Jun-07 2007 30-Mar-07 29-Dec-06 29-Sep-06 30-Jun-06 NET REVENUES: GAAP net revenues $ 3,168,332 $ 1,518,010 $ 1,650,322 $ 5,874,419 $ 1,539,741 $ 1,515,251 $ 1,419,089 $ 1,400,338 $ 5,199,366 $ 1,357,217 $ 1,315,873 $ 1,260,408 $ 1,265,868 Deferred revenue related to acquisitions(1) 9,740 4,969 4,771 62,770 8,246 13,775 18,243 22,506 53,298 7,565 10,468 12,984 22,281 Non-GAAP net revenues $ 3,178,072 $ 1,522,979 $ 1,655,093 $ 5,937,189 $ 1,547,987 $ 1,529,026 $ 1,437,332 $ 1,422,844 $ 5,252,664 $ 1,364,782 $ 1,326,341 $ 1,273,392 $ 1,288,149 GROSS PROFIT: GAAP gross profit $ 2,547,280 $ 1,208,940 $ 1,338,340 $ 4,654,089 $ 1,233,362 $ 1,216,090 $ 1,114,563 $ 1,090,074 $ 3,983,540 $ 1,050,954 $ 1,005,370 $ 960,007 $ 967,209 Deferred revenue related to acquisitions(1) 9,740 4,969 4,771 62,770 8,246 13,775 18,243 22,506 53,298 7,565 10,468 12,984 22,281 Stock-based compensation (2) 7,876 4,240 3,636 16,734 3,960 3,879 4,499 4,396 16,437 3,454 3,819 5,183 3,981 Amortization of acquired product rights (3) 171,563 86,602 84,961 349,327 86,403 84,502 89,062 89,360 342,333 84,873 84,512 85,339 87,609 Gross profit adjustment 189,179 95,811 93,368 428,831 98,609 102,156 111,804 116,262 412,068 95,892 98,799 103,506 113,871 Non-GAAP gross profit $ 2,736,459 $ 1,304,751 $ 1,431,708 $ 5,082,920 $ 1,331,971 $ 1,318,246 $ 1,226,367 $ 1,206,336 $ 4,395,608 $ 1,146,846 $ 1,104,169 $ 1,063,513 $ 1,081,080 - - #REF! OPERATING EXPENSES: GAAP operating expenses $ 2,051,919 $ 992,515 $ 1,059,404 $ 4,051,809 $ 1,019,941 $ 1,020,316 $ 1,055,674 $ 955,878 $ 3,463,798 $ 974,714 $ 846,332 $ 819,615 $ 823,137 Stock-based compensation (2) (81,619) (40,408) (41,211) (146,961) (38,582) (35,541) (36,490) (36,348) (137,403) (31,639) (32,298) (40,628) (32,838) Amortization of other intangible assets (3) (111,030) (55,651) (55,379) (225,131) (56,284) (54,996) (56,926) (56,925) (201,502) (49,932) (50,476) (50,479) (50,615) Restructuring (4) (26,795) (9,790) (17,005) (73,914) (22,031) (23,305) (9,578) (19,000) (70,236) (50,758) - (6,220) (13,258) Impairment of assets(5) (25,870) (26,281) 411 (95,816) (1,928) (7,342) (86,546) - - - - - - Gain on sale of assets (6) 1,341 1,341 - - - - - - - - - - - Executive incentive bonuses (7) 396 - 396 (3,436) 104 (424) (1,314) (1,802) (3,995) - (897) (1,083) (2,015) Integration (8) - - - (441) - - - (441) (744) (744) - - - Operating expense adjustment (243,577) (130,789) (112,788) (545,699) (118,721) (121,608) (190,854) (114,516) (413,880) (133,073) (83,671) (98,410) (98,726) Non-GAAP operating expenses $ 1,808,342 $ 861,726 $ 946,616 $ 3,506,110 $ 901,220 $ 898,708 $ 864,820 $ 841,362 $ 3,049,918 $ 841,641 $ 762,661 $ 721,205 $ 724,411 - - #REF! OPERATING INCOME: GAAP operating income $ 495,361 $ 216,425 $ 278,936 $ 602,280 $ 213,421 $ 195,774 $ 58,889 $ 134,196 $ 519,742 $ 76,240 $ 159,038 $ 140,391 $ 144,072 Gross profit adjustment 189,179 95,811 93,368 428,831 98,609 102,156 111,804 116,262 412,068 95,892 98,799 103,506 113,871 Operating expense adjustment 243,577 130,789 112,788 545,699 118,721 121,608 190,854 114,516 413,880 133,073 83,671 98,410 98,726 Non-GAAP operating income $ 928,117 $ 443,025 $ 485,092 $ 1,576,810 $ 430,751 $ 419,538 $ 361,547 $ 364,974 $ 1,345,690 $ 305,205 $ 341,508 $ 342,307 $ 356,669 - - #REF! NET INCOME: GAAP net income $ 326,765 $ 140,073 $ 186,692 $ 463,850 $ 186,386 $ 131,890 $ 50,368 $ 95,206 $ 404,380 $ 60,894 $ 116,770 $ 126,181 $ 100,535 Gross profit adjustment 189,179 95,811 93,368 428,831 98,609 102,156 111,804 116,262 412,068 95,892 98,799 103,506 113,871 Operating expense adjustment 243,577 130,789 112,788 545,699 118,721 121,608 190,854 114,516 413,880 133,073 83,671 98,410 98,726 Gain on sale of assets (6) - - - (3,277) - (3,277) - - (19,988) (3,223) - (16,765) - Settlements of litigation (9) 1,748 1,748 - (58,500) (58,500) - - - - - - - - Joint venture: Amortization of other intangible assets/stock-based compensation(10) 3,405 2,035 1,370 - - - - - - - - - - Income tax effect on above items (11) (111,717) (59,279) (52,438) (250,092) (35,786) (60,629) (90,391) (63,286) (217,863) (59,869) (48,433) (49,868) (59,692) Non-GAAP net income $ 652,957 $ 311,177 $ 341,780 $ 1,126,511 $ 309,430 $ 291,748 $ 262,635 $ 262,698 $ 992,477 $ 226,767 $ 250,807 $ 261,464 $ 253,440 - - #REF! EARNINGS PER SHARE - DILUTED: GAAP earnings per share $ 0.38 $ 0.16 $ 0.22 $ 0.52 $ 0.22 $ 0.15 $ 0.06 $ 0.10 $ 0.41 $ 0.07 $ 0.12 $ 0.13 $ 0.10 Stock-based compensation adjustment per share, net of tax (2) 0.08 0.04 0.04 0.14 0.04 0.04 0.04 0.04 0.12 0.03 0.03 0.04 0.04 Other non-GAAP adjustments per share, net of tax (1, 3-10) 0.31 0.17 0.14 0.61 0.10 0.14 0.19 0.15 0.48 0.14 0.11 0.09 0.15 Non-GAAP earnings per share $ 0.77 $ 0.37 $ 0.40 $ 1.27 $ 0.36 $ 0.33 $ 0.29 $ 0.29 $ 1.01 $ 0.24 $ 0.26 $ 0.26 $ 0.29 WEIGHTED-AVERAGE SHARES OUTSTANDING - DILUTED: 852,334 GAAP weighted-average shares outstanding 853,174 853,994 884,136 856,747 876,221 892,759 910,302 983,261 932,985 963,309 987,916 1,048,833 (See notes on following page) 4
  5. 5. The non-GAAP financial measures included in the tables above are non-GAAP net revenues, non-GAAP net income and non-GAAP earnings per share, which adjust for the following items: business combination accounting entries, stock-based compensation expense, restructuring charges, charges related to the amortization of intangible assets and acquired product rights, litigation settlements, write-downs of assets and certain other items. We believe the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company's operating performance for the reasons discussed below. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company's performance to prior periods and to our peers and that investors benefit from an understanding of these non-GAAP financial measures. (1) Fair value adjustment to deferred revenue. We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this revenue provides useful information to our management, as well as to investors. (2) Stock-based compensation. Consists of expenses for employee stock options, restricted stock units, restricted stock awards and our employee stock purchase plan determined in accordance with Statement of Financial Accounting Standards Number 123(R), or SFAS 123(R). When evaluating the performance of our individual business units and developing short and long term plans, we do not consider stock-based compensation charges. Our management team is held accountable for cash-based compensation, but we believe that management is limited in its ability to project the impact of stock-based compensation and accordingly is not held accountable for its impact on our operating results. Although stock-based compensation is necessary to attract and retain quality employees, our consideration of stock based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. Furthermore, unlike cash compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Further, we believe it is useful to investors to understand the impact of SFAS 123(R) to our results of operations. For the three and six months ended October 3, 2008 and September 28, 2007, respectively, stock-based compensation was allocated as follows: Three Months Ended Six Months Ended October 3, September 28, October 3, September 28, 2008 2007 2008 2007 Cost of revenues $ 4,240 $ 4,499 $ 7,876 $ 8,895 Sales and marketing 18,172 13,957 37,532 28,420 Research and development 14,026 14,841 27,153 29,008 General and administrative 8,210 7,692 16,934 15,410 Total stock-based compensation $ 44,648 $ 40,989 $ 89,495 $ 81,733 (3) Amortization of acquired product rights and other intangible assets. When conducting internal development of intangible assets, accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangibles. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate these amortization charges from our non-GAAP operating results to provide better comparability of pre and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets. (4) Restructuring. We have engaged in various restructuring activities over the past several years that have resulted in costs associated with severance, benefits, outplacement services, and excess facilities. Each restructuring has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring activities in the ordinary course of business. While our operations previously benefited from the employees and facilities covered by our various restructuring charges, these employees and facilities have benefited different parts of our business in different ways, and the amount of these charges has varied significantly from period to period. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them. 5
  6. 6. (5) Impairment of Assets. Following a review of our real estate holdings we determined that certain long-term assets were underutilized. As a result, we have committed to sell vacant buildings and land. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we have classified these assets as held for sale and adjusted the assets’ carrying value when above the fair market value less cost to sell. During the September 2007 quarter, management determined that certain tangible and intangible assets and liabilities of the Storage and Server Management segment (formally the Data Center Management segment) did not meet the long term strategic objectives of the segment, and we recorded a write-down in the value of these assets and liabilities to the respective estimated fair value. On March 8, 2008 these assets were sold to a third party. We do not believe that these charges are indicative of future operating results and believe that investors benefit from an understanding of our operating results without giving effect to them. (6) Gain on sale of assets. During the September 2008 quarter, we sold two buildings. We exclude these gains because each is a unique one-time occurrence that is not closely related to, or a function of, our ongoing operations. (7) Executive incentive bonuses. We have excluded bonuses related to acquisitions and executive sign-on bonuses for newly hired executives. We expect the benefit from these hires and retentions to extend over an indeterminate future period, but under GAAP we are required to expense the entire cost of the bonus in the period paid. We exclude these amounts to provide better comparability of the periods that include and do not include these charges. We believe that investors benefit from an understanding of our operating results for the periods presented without giving effect to these charges. (8) Integration. These charges consist of expenses incurred for consulting services and other professional fees associated with integration activities of acquisitions. Because these expenses are non- recurring and unique to specific acquisitions, we believe they are not indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them. (9) Settlements of litigation. From time to time we are party to legal settlements. We excluded the impact of these settlements because we do not consider these litigations to be part of the ongoing operation of our business and because of the singular nature of the claims underlying the matter. (10) Joint venture. Consistent with the reasons discussed in footnotes 2 and 3 above, we exclude stock-based compensation charges and amortization of other intangible assets related to the joint venture from our non-GAAP net income. (11) Income tax effect on above items. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP adjustments on non-GAAP net income -GAAP adjustments on non- GAAP net income. 6
  7. 7. SYMANTEC CORPORATION Reconciliation of GAAP Revenue Components to Non-GAAP Revenue Components (In thousands) (Unaudited) Fiscal YTD 2009 Three Months Ended Oct 3, 2008 Three Months Ended Jul 4, 2008 Non-GAAP Non-GAAP Non-GAAP Adjustments (1) Adjustments (1) Adjustments (1) GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP Net Revenues $ 3,168,332 $ 9,740 $ 3,178,072 $ 1,518,010 $ 4,969 $ 1,522,979 $ 1,650,322 $ 4,771 $ 1,655,093 - - - - - - - - - Revenue by Segment (2) Security & Compliance Group $ 846,639 $ 5,468 $ 852,107 $ 400,992 $ 2,192 $ 403,184 $ 445,647 $ 3,276 $ 448,923 Storage and Server Management Group 1,187,465 889 1,188,354 572,309 230 572,539 615,156 659 615,815 Consumer 909,986 3,345 913,331 437,655 2,537 440,192 472,331 808 473,139 Services 223,337 37 223,374 106,624 10 106,634 116,713 27 116,740 Other $ 905 $ 1$ 906 $ 430 $ -$ 430 $ 475 $ 1$ 476 - - 0.20 - - - - - 0.20 Revenue by Geography: Americas (3) $ 1,683,277 $ 8,208 $ 1,691,485 $ 821,823 $ 4,415 $ 826,238 $ 861,454 $ 3,793 $ 865,247 EMEA 1,038,021 1,289 1,039,310 480,182 479 480,661 557,839 810 558,649 Asia Pacific/Japan $ 447,034 $ 243 $ 447,277 $ 216,005 $ 75 $ 216,080 $ 231,029 $ 168 $ 231,197 - - - - - - - - - Total U.S. Revenue $ 1,539,979 $ 8,196 $ 1,548,175 $ 754,674 $ 4,414 $ 759,088 $ 785,305 $ 3,782 $ 789,087 Total International Revenue $ 1,628,353 $ 1,544 $ 1,629,897 $ 763,336 $ 555 $ 763,891 $ 865,017 $ 989 $ 866,006 - - - - - - - - - FY 2008 Three Months Ended Mar 28, 2008 Three Months Ended Dec 28, 2007 Three Months Ended Sep 28, 2007 Three Months Ended Jun 29, 2007 Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Adjustments (1) Adjustments (1) Adjustments (1) Adjustments (1) Adjustments (1) GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP Net Revenues $ 5,874,419 $ 62,770 $ 5,937,189 $ 1,539,741 $ 8,246 $ 1,547,987 $ 1,515,251 $ 13,775 $ 1,529,026 $ 1,419,089 $ 18,243 $ 1,437,332 $ 1,400,338 $ 22,506 $ 1,422,844 (2) Revenue by Segment Security & Compliance Group $ 1,609,468 $ 38,740 $ 1,648,208 $ 423,026 $ 5,900 $ 428,926 $ 410,249 $ 8,674 $ 418,923 $ 388,524 $ 10,961 $ 399,485 $ 387,669 $ 13,205 $ 400,874 Storage and Server Management Group 2,136,307 15,386 2,151,693 561,076 1,834 562,910 561,695 3,460 565,155 507,956 4,398 512,354 505,580 5,694 511,274 Consumer 1,746,089 - 1,746,089 448,625 - 448,625 440,206 - 440,206 433,508 - 433,508 423,750 - 423,750 Services 380,620 8,642 389,262 106,143 510 106,653 102,606 1,641 104,247 88,773 2,884 91,657 83,098 3,607 86,705 Other $ 1,935 $ 2$ 1,937 $ 871 $ 2$ 873 $ 495 $ -$ 495 $ 328 $ -$ 328 $ 241 $ -$ 241 $ - $ - $ - $ -$ - $ - $ -$ - $ - $ -$ - $ - $ - $ - $ - Revenue by Geography: Americas (3) $ 3,095,492 $ 42,482 $ 3,137,974 $ 799,756 $ 6,051 $ 805,807 $ 779,817 $ 9,258 $ 789,075 $ 764,470 $ 12,222 $ 776,692 $ 751,449 $ 14,951 $ 766,400 EMEA 1,963,319 17,349 1,980,668 520,049 1,794 521,843 524,981 3,879 528,860 460,485 5,191 465,676 457,804 6,485 464,289 Asia Pacific/Japan $ 815,608 $ 2,939 $ 818,547 $ 219,936 $ 401 $ 220,337 $ 210,453 $ 638 $ 211,091 $ 194,134 $ 830 $ 194,964 $ 191,085 $ 1,070 $ 192,155 Total U.S. Revenue $ 2,814,444 $ 41,783 $ 2,856,227 $ 729,095 $ 5,980 $ 735,075 $ 708,186 $ 9,080 $ 717,266 $ 695,517 $ 12,027 $ 707,544 $ 681,646 $ 14,696 $ 696,342 Total International Revenue $ 3,059,975 $ 20,987 $ 3,080,962 $ 810,646 $ 2,266 $ 812,912 $ 807,065 $ 4,695 $ 811,760 $ 723,572 $ 6,216 $ 729,788 $ 718,692 $ 7,810 $ 726,502 Three Months Ended Sep 29, 2006 FY 2007 Three Months Ended Mar 30, 2007 Three Months Ended Dec 29, 2006 Three Months Ended Jun 30, 2006 Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Adjustments (1) Adjustments (1) Adjustments (1) Adjustments (1) Adjustments (1) GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP Net Revenues $ 5,199,366 $ 53,298 $ 5,252,664 $ 1,357,217 $ 7,565 $ 1,364,782 $ 1,315,873 $ 10,468 $ 1,326,341 $ 1,260,408 $ 12,984 $ 1,273,392 $ 1,265,868 $ 22,281 $ 1,288,149 Revenue By Segment: (2) 361,294 ## $ 341,400 ## Security & Compliance Group $ 1,408,906 $ 3,779 $ 1,412,685 $ 360,722 $ 572 $ 361,467 $ 823 $ 362,290 $ 340,452 $ 948 $ $ 346,265 $ 1,436 $ 347,701 Storage and Server Management Group 1,906,607 49,317 1,955,924 501,790 6,993 508,783 ## 479,758 9,645 489,403 459,151 12,036 471,187 ## 465,908 20,643 486,551 Consumer 1,590,505 - 1,590,505 408,200 - 408,200 406,145 - 406,145 394,382 - 394,382 381,778 - 381,778 Services 293,226 202 293,428 86,439 - 86,439 68,517 - 68,517 66,356 - 66,356 71,914 202 72,116 Other $ 122 $ -$ 122 $ 66 $ -$ 66 $ (14) $ -$ (14) $ 67 $ -$ 67 $ 3 $ -$ 3 Revenue by Geography: Americas (3) $ 2,840,570 $ 35,495 $ 2,876,065 $ 729,747 $ 4,711 $ 734,458 $ 720,611 $ 6,832 $ 727,443 $ 696,367 $ 9,071 $ 705,438 $ 693,845 $ 14,881 $ 708,726 EMEA 1,644,177 13,244 1,657,421 442,395 2,339 444,734 417,813 2,987 420,800 386,422 3,166 389,588 397,547 4,752 402,299 Asia Pacific/Japan $ 714,619 $ 4,559 $ 719,178 $ 185,075 $ 515 $ 185,590 $ 177,449 $ 649 $ 178,098 $ 177,619 $ 747 $ 178,366 $ 174,476 $ 2,648 $ 177,124 Total U.S. Revenue $ 2,560,194 $ 33,403 $ 2,593,597 $ 654,748 $ 4,401 $ 659,149 $ 650,721 $ 6,467 $ 657,188 $ 628,614 $ 8,659 $ 637,273 $ 626,111 $ 13,876 $ 639,987 Total International Revenue $ 2,639,172 $ 19,895 $ 2,659,067 $ 702,469 $ 3,164 $ 705,633 $ 665,152 $ 4,001 $ 669,153 $ 631,794 $ 4,325 $ 636,119 $ 639,757 $ 8,405 $ 648,162 7
  8. 8. We include certain non-GAAP revenue and deferred revenue components in the tracking and forecasting of our revenue and management of our business. This includes non-GAAP revenue associated with deferred revenue that was excluded as a result of purchase accounting adjustments related to acquisitions. We believe the non-GAAP revenue measures set forth above are useful to investors, and such items are used by our management, because this revenue is reflective of our ongoing operating results. (1) We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, acquired business had recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our for our pre-existing products and services. We believe that the inclusion of this revenue provides useful information to our management, as well as to investors. (2) During the first quarter of fiscal year 2009, Altiris services’ revenue was reclassified from the Security and Compliance segment to the Services segment. Data shown from the prior periods have been reclassified to match the current reporting structure. (3) The Americas includes the United States, Latin America, and Canada. 8
  9. 9. SYMANTEC CORPORATION Condensed Consolidated Balance Sheets (In thousands) (Unaudited) October 3, July 04, March 28, December 28, September 28, June 29, March 30, December 29, September 29, June 30, 2008 2008 2008 2007 2007 2007 2007 2006 2006 2006 ASSETS Current assets: Cash and cash equivalents $ 2,262,157 $ 2,045,243 $ 1,890,225 $ 1,484,489 $ 1,388,364 $ 1,374,049 $ 2,559,034 $ 2,592,003 $ 2,607,786 $ 3,685,517 Short-term investments 42,485 241,062 536,728 482,551 609,837 639,710 409,133 364,466 326,457 392,294 Trade accounts receivable, net 645,179 652,458 758,200 901,615 601,837 568,721 666,968 744,766 563,608 540,552 Inventories 26,590 28,324 34,138 34,591 32,735 34,666 42,183 43,804 43,010 42,830 Deferred income taxes 196,273 199,188 193,775 171,198 172,422 163,146 165,323 145,687 119,490 132,387 Other current assets 258,495 233,381 316,852 300,154 224,481 300,661 228,406 223,258 206,819 208,758 Total current assets 3,431,179 3,399,656 3,729,918 3,374,598 3,029,676 3,080,953 4,071,047 4,113,984 3,867,170 5,002,338 942,754 1,028,534 1,001,750 1,039,510 1,125,560 1,113,315 1,092,240 1,114,018 1,062,354 1,098,629 Property and equipment, net 526,143 607,600 648,950 733,278 788,884 925,595 909,878 992,638 1,067,766 1,150,352 Acquired product rights, net 1,141,443 1,197,604 1,243,524 1,299,083 1,315,003 1,411,713 1,245,638 1,295,445 1,339,779 1,390,258 Other intangible assets, net 11,323,506 11,312,011 11,207,357 11,208,960 10,948,364 10,969,774 10,340,348 10,344,055 10,326,629 10,329,888 Goodwill 133,073 143,819 150,000 - - - - - - - Investment in joint venture 65,120 61,323 55,291 53,661 59,264 62,959 63,987 65,601 66,462 59,272 Other long-term assets 58,781 58,521 55,304 58,455 49,998 57,300 27,732 28,547 14,868 11,552 Long-term deferred income taxes Total assets $ 17,621,999 $ 17,809,068 $ 18,092,094 $ 17,767,545 $ 17,316,749 $ 17,621,609 $ 17,750,870 $ 17,954,288 $ 17,745,028 $ 19,042,289 - - - - - - - - LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 210,027 $ 181,326 $ 169,631 $ 162,871 $ 169,422 $ 165,715 $ 149,131 $ 198,622 $ 166,844 $ 161,938 Accrued compensation and benefits 344,051 349,055 431,345 410,171 324,236 307,202 307,824 298,286 263,415 258,697 Current deferred revenue 2,337,237 2,602,551 2,661,515 2,497,697 2,265,575 2,330,411 2,387,733 2,199,844 1,990,193 2,021,949 Income taxes payable 50,196 77,807 72,263 78,997 40,520 13,056 238,486 338,049 260,183 360,681 Short-term borrowing - - 200,000 200,000 - - - - - - Short-term convertible debentures - - - - - - - - - 518,200 Other current liabilities 228,906 222,340 264,832 231,686 191,500 224,416 234,915 182,760 169,515 170,572 Total current liabilities 3,170,417 3,433,079 3,799,586 3,581,422 2,991,253 3,040,800 3,318,089 3,217,561 2,850,150 3,492,037 Convertible senior notes 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 Long-term deferred revenue 375,989 409,131 415,054 379,476 333,022 334,364 366,050 359,357 335,162 283,385 Long-term deferred tax liabilities 194,728 197,069 219,341 219,778 277,041 358,010 343,848 226,864 244,324 233,230 Long-term income taxes payable 491,612 499,519 478,743 459,126 424,595 414,322 - - - - Other long-term liabilities 95,961 104,302 106,187 98,662 85,419 38,647 21,370 22,118 21,470 26,320 Total Liabilities 6,428,707 6,743,100 7,118,911 6,838,464 6,211,330 6,286,143 6,149,357 5,925,900 5,551,106 6,134,972 Stockholders’ equity: Common stock 8,357 8,376 8,393 8,452 8,650 8,813 8,994 9,275 9,413 9,875 Additional paid-in capital 9,121,142 9,097,974 9,139,084 9,207,367 9,495,987 9,740,361 10,061,144 10,511,659 10,759,857 11,552,839 Accumulated other comprehensive income 182,580 158,637 159,792 199,488 195,814 189,725 182,933 184,479 174,900 172,651 Retained earnings 1,881,213 1,800,981 1,665,914 1,513,774 1,404,968 1,396,567 1,348,442 1,322,975 1,249,752 1,171,952 Total stockholders’ equity 11,193,292 11,065,968 10,973,183 10,929,081 11,105,419 11,335,466 11,601,513 12,028,388 12,193,922 12,907,317 Total liabilities and stockholders' equity $ 17,621,999 $ 17,809,068 $ 18,092,094 $ 17,767,545 $ 17,316,749 $ 17,621,609 $ 17,750,870 $ 17,954,288 $ 17,745,028 $ 19,042,289 9
  10. 10. SYMANTEC CORPORATION Reconciliation of GAAP deferred revenue to Non-GAAP deferred revenue (in thousands) (Unaudited) As of: Oct 03, 2008 Jul 04, 2008 Mar 28, 2008 Dec 28, 2007 Sep 28, 2007 Jun 29, 2007 Mar 30, 2007 Dec 29, 2006 Sep 29, 2006 Deferred revenue reconciliation GAAP deferred revenue $ 2,713,226 $ 3,011,682 $ 3,076,569 $ 2,877,173 $ 2,598,597 $ 2,664,775 $ 2,753,783 $ 2,559,201 $ 2,325,355 Add back: Deferred revenue related to acquisitions (1) 7,833 12,834 11,662 19,856 25,888 44,007 17,958 25,448 22,263 Non-GAAP deferred revenue $ 2,721,059 $ 3,024,516 $ 3,088,231 $ 2,897,029 $ 2,624,485 $ 2,708,782 $ 2,771,741 $ 2,584,649 $ 2,347,618 We include certain non-GAAP revenue and deferred revenue components in the tracking and forecasting of our revenue and management of our business. This includes non-GAAP revenue associated with deferred revenue that was excluded as a result of purchase accounting adjustments related to acquisitions. We believe the non-GAAP deferred revenue measures set forth above are useful to investors, and such items are used by our management, because this revenue is reflective of our ongoing operating results. (1) We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses had recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this deferred revenue provides useful information to our management, as well as to investors. 10
  11. 11. SYMANTEC CORPORATION Trended Cash Flow Statements (In thousands) (Unaudited) Fiscal YTD Three months ended Fiscal Three months ended Fiscal Three months ended 2009 3-Oct-08 4-Jul-08 2008 28-Mar-08 28-Dec-07 28-Sep-07 29-Jun-07 2007 30-Mar-07 29-Dec-06 29-Sep-06 30-Jun-06 OPERATING ACTIVITIES: Net income $ 326,765 $ 140,073 $ 186,692 $ 463,850 $ 186,386 $ 131,890 $ 50,368 $ 95,206 $ 404,380 $ 60,894 $ 116,770 $ 126,182 $ 100,534 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 411,567 211,511 200,056 824,109 205,705 200,911 204,048 213,445 811,443 201,967 200,982 201,618 206,876 Stock-based compensation expense 89,495 44,648 44,847 163,695 42,544 39,417 40,991 40,743 153,880 35,134 36,117 45,770 36,859 Impairment of assets 25,870 26,281 (411) 1,200 (86,546) 1,200 86,546 - - - - - - Impairment of equity investments - - - 1,000 1,000 - - - 2,841 - - - 2,841 Deferred income taxes (917) (15,634) 14,717 (180,215) (1,568) (74,747) (78,781) (25,119) 11,173 90,240 (61,945) 20,211 (37,333) Income tax benefit from the exercise of stock options 17,929 7,984 9,945 29,443 1,713 10,462 7,405 9,863 43,118 17,477 14,798 5,705 5,138 Excess income tax benefit from the exercise of stock options (16,007) (6,974) (9,033) (26,151) (7,844) (4,778) (4,485) (9,044) (25,539) (5,951) (13,694) (4,001) (1,893) Loss (gain) on sale of assets - - - 97,463 91,144 6,319 - - (19,937) (3,221) - (16,716) - Net (gain) on settlements of litigation - - - (58,500) (58,500) - - - - - - - - Loss from joint venture 16,927 10,746 6,181 - - - - - - - - - - Realized and other than temporary impairment loss on investments 2,330 2,330 - - - - - - - - - - - Other 11,235 4,664 6,571 (894) (3,970) - 3,336 (260) 912 (302) 1,358 356 (500) Net change in assets and liabilities, excluding effects of acquisitions: Trade accounts receivable, net 99,884 (19,001) 118,885 (7,002) 158,390 (284,378) (22,405) 141,391 33,714 81,169 (167,072) (24,449) 144,066 Inventories 5,945 121 5,824 10,791 1,567 (1,273) 2,791 7,706 10,324 1,982 185 (313) 8,470 Accounts payable (986) 7,679 (8,665) 667 13,916 (20,896) (5,035) 12,682 (25,623) (50,696) 39,088 2,736 (16,751) Accrued compensation and benefits (81,905) 9,001 (90,906) 97,133 13,339 84,212 16,062 (16,480) 23,169 11,091 28,821 6,097 (22,840) Deferred revenue (228,632) (158,366) (70,266) 126,716 117,250 238,479 (119,009) (110,004) 399,517 177,989 198,900 26,634 (4,006) Income taxes payable (51,477) (20,885) (30,592) 196,567 (18,895) 84,026 112,044 19,392 (181,926) (94,702) 70,223 (97,362) (60,085) Other assets 72,683 (7,990) 80,673 81,115 22,259 8,452 30,075 20,329 (23,332) (6,806) (21,104) (12,000) 16,578 Other liabilities (38,839) 12,103 (50,942) (2,334) (3,520) 42,709 7,018 (48,541) 48,121 50,719 10,944 (3,828) (9,714) Net cash provided by operating activities 661,867 248,291 413,576 1,818,653 674,370 462,005 330,969 351,309 1,666,235 566,984 454,371 276,640 368,240 INVESTING ACTIVITIES: - - - - - - - Purchase of property and equipment (125,339) (67,644) (57,695) (273,807) (64,678) (71,100) (63,341) (74,688) (419,749) (70,154) (113,108) (89,413) (147,074) Proceeds from sale of property and equipment 39,547 39,547 - 104,715 104,715 - (903) 903 121,464 34,560 - 86,904 - Purchase of intangible assets - - - - - - - - (13,300) - (13,300) - - Cash payments for business acquisitions, net of cash and cash equivalents acquired (186,826) (20,470) (166,356) (1,162,455) (11,772) (298,397) (11,718) (840,568) (33,373) (8,358) (20,425) (2,944) (1,646) Investment in Joint Venture - - - (150,000) (150,000) - - - - - - - - Purchases of available-for-sale securities (172,891) (295) (172,596) (1,233,954) (408,850) (184,534) (340,039) (300,531) (226,905) (97,339) (87,074) (29,809) (12,683) Proceeds from sales of available-for-sale securities 667,693 195,695 471,998 1,189,283 358,380 332,517 394,775 103,611 349,408 53,950 49,490 98,703 147,265 Net cash provided by (used in) investing activities 222,184 146,833 75,351 (1,526,218) (172,205) (221,514) (21,226) (1,111,273) (222,455) (87,341) (184,417) 63,441 (14,138) FINANCING ACTIVITIES: Sale of common stock warrants - - - - - - - - 326,102 - - - 326,102 Repurchase of common stock (399,894) (199,896) (199,998) (1,499,995) (200,019) (399,992) (399,989) (499,995) (2,846,312) (594,998) (384,996) (974,958) (891,360) Net proceeds from sales of common stock under employee stock benefit plans 185,537 110,550 74,987 224,152 59,990 33,942 68,057 62,163 230,295 61,039 51,274 77,501 40,481 Proceeds from debt issuance - - - - - - - - 2,067,299 (463) - - 2,067,762 Purchase of bond hedge - - - - - - - - (592,490) - - - (592,490) Proceeds from short-term borrowing - - - 200,000 - 200,000 - - - - - - - Repayment of short-term borrowing (200,000) - (200,000) - - - - - - - - - - Excess income tax benefit from the exercise of stock options 16,007 6,974 9,033 26,151 7,844 4,778 4,485 9,044 25539 5,951 13,694 4,001 1,893 Repayment of other long-term obligation (3,716) (1,874) (1,842) (11,724) (1,811) (2,309) (2,271) (5,333) (520,000) - - (520,000) - Tax payments related to restricted stock issuance (14,830) (62) (14,768) (4,137) (395) (692) (111) (2,939) - - - - - Net cash (used in) provided by financing activities (416,896) (84,308) (332,588) (1,065,553) (134,391) (164,273) (329,829) (437,060) (1,309,567) (528,471) (320,028) (1,413,456) 952,388 Effect of exchange rate fluctuations on cash and cash equivalents (95,223) (93,902) (1,321) 104,309 37,962 19,907 34,401 12,039 109,199 15,859 34,291 (4,356) 63,405 Increase (decrease) in cash and cash equivalents 371,932 216,914 155,018 (668,809) 405,736 96,125 14,315 (1,184,985) 243,412 (32,969) (15,783) (1,077,731) 1,369,895 Beginning cash and cash equivalents 1,890,225 2,045,243 1,890,225 2,559,034 1,484,489 1,388,364 1,374,049 2,559,034 2,315,622 2,592,003 2,607,786 3,685,517 2,315,622 Ending cash and cash equivalents $ 2,262,157 $ 2,262,157 $ 2,045,243 $ 1,890,225 $ 1,890,225 $ 1,484,489 $ 1,388,364 $ 1,374,049 $ 2,559,034 $ 2,559,034 $ 2,592,003 $ 2,607,786 $ 3,685,517 (216,914) - - 11

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